Nrma To Cover Customers For Storm-related Flooding
Sydney Morning Herald
Monday August 30, 1999
A policy change by one of the biggest general insurers, the NRMA, will cover customers for storm-related flood damage to their homes.
The change is effective immediately for all new and existing home and contents insurance policies at no extra cost to customers.
But the inclusion does not cover mainstream flooding, although the NRMA said it was looking into the viability of such policy.
The NRMA's president, Mr Nicholas Whitlam, said the inclusion of storm-related flood cover was in response to community expectations heightened by events such as the Wollongong and Coffs Harbour floods.
After last year's Wollongong storm, protesters targeted insurance firms which had cited policy clauses for their refusal to pay policyholders for damage caused during the storm.
Only after intense public pressure many claims from the Wollongong floods were settled, including those held by NRMA policyholders.
The NRMA said flash-flood storms were different to mainstream flooding in which residents were often given warning and knew of the damage risks.
Its home insurance manager, Mr Tom Pudney, believed the NRMA was the first insurance company to introduce the cover "where it's fully covered up to the sum insured".
A spokesman for the Insurance Council of Australia, Mr Rod Frail, was aware of several other companies who were reviewing flood-related insurance. "There is no doubt the industry did not come out of the Wollongong episode well," he said.
"But some companies may well decide to continue to exclude it [storm-related damage] because it has been very difficult to assess the risk of flood."
The executive director of GIO General, Mr Martin Spry, said his company introduced a similar policy on July 1, last year. The policy covered "damage from flooding within 24 hours of the rain which caused the flood".
Mr Frail said the council had been talking with governments at all levels to convince them to spend more money on flood mitigation and to provide better information on flood exposure for the community and insurers.
Better drainage and a more responsible attitude to land use, particularly at the local government level "where it has been clear from recent disastrous events that there has been inappropriate development of land in flood-prone areas", would reduce the impact of flood on local communities, he said.
The Storm Water Action Group, formed after the Wollongong storm last August, yesterday said about 60 Wollongong storm victims were yet to settle their claims with insurers.
© 1999 Sydney Morning Herald
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